Susta inab le approaches in ach iev ing compl ian t , smar t

and (a lmos t ) pa in less cus tomer onboard ing

Graham M L loyd

Di rec to r, Indus t ry Pr inc ipa l – F inanc ia l Serv ices

© 2015 Pegasystems Inc. 2

OECD CRS: 90 countries signed up, 50 for 2016 adoption. The journey may be more exhilarating for some than others……..

© 2015 Pegasystems Inc. 3

As complex geography, LOB and product-specific regulations proliferate:

Fines for non-compliance are multiplying

Regulators increasingly expect an enterprise-wide approach

Customer interaction models are inconsistent across geographies/LOBs

Operational inefficiencies result from disparate systems requiring similar information in multiple areas

Onboarding time is ever-longer and costs are rocketing (>USD 25K per institutional client)

In response, global banks are:

Moving towards global KYC centralisation

Migrating some components to the front office

Attempting to transform Client Lifecycle Management to recover time to revenue, quality of customer experience

Meantime, regulations are driving big changes in both KYC and Client Lifecycle Management (CLM)

Forrester: The number one pain point during Onboarding is KYC TowerGroup: KYC/Onboarding technology spend will reach USD 10Billion by 2017

© 2015 Pegasystems Inc. 4

Mr. Tom B (1120) | Commercial Jackson Rd. East Hartford Work: 768-247-3499 Net Worth: $100Million

T Bridges (1241) | Private 117-2a Jackson Rd East, Hartfrd Annual Income: $2M

Tom Bridges (1322) | Institutional 2a East Jackson Tom.bridges@gmail.com Employer: Fed Reserve

Tom Brid (1411) | Retail 212-676-8099 2a E Jackson Rd, Hartford, CT 078911/ tom.bridges@gmail.com Annual Income: $2,000,000

Current State Future State

Tom Bridges

Single Customer View

Prospecting Client

Retail Client

Institutional Client

Private Client

Commercial Client

The most successful players use technology to integrate CLM with Compliance to deliver a single, customer-centric, end-to-end approach

Initiate Request Enrich KYC/CDD/ Suitability

Credit Underwriting/

Sanctioning

Legal Docs & Agreements

Account

Setup/

Fulfillment

Transact/

Maintain

© 2015 Pegasystems Inc. 5

SYSTEMS OF

OMNI-CHANNEL CLIENT INTERACTIONS

CIF Trading Accounting 3rd Party ECM

INTELLIGENT WORK AUTOMATION

REGULATORY COMPLIANCE DATA MANAGEMENT

The scale of the challenge can appear daunting

© 2015 Pegasystems Inc. 6

It helps to start with a simplified view of what good looks like

© 2015 Pegasystems Inc. 7

Onboarding

Audit and Reporting

Rules-Driven Suitability/Product

Selection Age

Income

Risk Tolerance

Investment Experience

Investment Objectives

Products

Booking Location

Security Futures

• Higher Risk

Hedge Fund

• Higher Risk

Mutual Fund

• Lower Risk

System of Record

Tax Reporting System

Rules-Driven KYC Technology Relationship Management: 360 View

Understanding the driver data helps ground and enable a rule-based approach

CRM

Driver

Data

Multiple

Streams

Agility: Designated business users can update

rules and processes as risks and regulatory

requirements change

ABC Corp

Jane Doe

John Doe

Bob Smith

Acme

Country Products Dynamic

Risk Rating

Driver Data

• Type

• Risk

• Legal / Mailing

SDD Requirements

EDD

Requirements

Screening Integration

Existing Client

Legal Entity/

Booking Entity

Underlying Parties

Suitability Requirements

• FINRA

• MiFID

FATCA Requirements

Web Self Service

Broker

iPad

Sales

ABC Corp Jane Doe John Doe

© 2015 Pegasystems Inc. 8

The rule-based approach can be applied across the Lifecycle’s processes…….

Initiate Request

KYC /CDD/Suitability Credit

Sales Service

Legal /Docs

Account Setup

Transact/

Retain

Platform for 360° View of Client & End-to-End Client Lifecycle Management

Client Self-Service

Mobile onboarding,

approvals and notifications

Sales System Integration

System Validation – Right

First Time

All Requests - Products /

Service / Multiple regions

Bulk Onboarding of

intermediary clients

Dashboards

Dynamic Case

Management and

Routing

Integration with

and orchestration

of local Legal

systems

Documentation

validation and

approval

Situationally

aware

Dynamic & Situational KYC/CDD, regulatory rules

by product, line of business, geography (AML,

Suitability, FATCA, MiFID, FINRA, IIROC, EMIR)-

Re-use of due diligence globally, with the ability to

segregate based on privacy rules

Retrieve Markit, SWIFT and other third-party

source data

Automated Global Master Folder Creation for All

Entities & Related Parties

Manage regulatory rule change in the system

Re-review management

Dynamic Case

Management

and Routing

Decisioning for

Credit Risk

Integration with

& orchestration

of local Credit

systems

Situationally

aware

Integration into

Reference Data

Use upfront data

capture to

minimize rekeying

Update trading &

settlement with

product

entitlement

Update Trading

Controls

Service the customer

Global 360 Master View

Manage all interactions,

requests and

requirements globally

Cross-sell/Up-sell

Intent-led customer

service

Periodic Re-reviews

Onboarding For FS

Know Your Customer

Pega 7 Build For Change Platform

Customer Process Manager for FS

Initiate/Enrich Risk & Approvals Fulfillment

Enrich

Service

Automated routing to

Sales Assistants and Middle

Office

Data/Doc collection rules and

requirements

Initiate CDD Utility request

(Markit)

Situational rules by booking

entity, LOB, products driving

the right data enrichment

rules at the right time

Legal entity mgmt

© 2015 Pegasystems Inc. 9

……but things come to fulfilment only when Case Management is also deployed

Stage-based Case Management

© 2015 Pegasystems Inc. 10

The underpinning technology should meet clear criteria

Readily usable by both front and back office

Extend seamlessly between Retail and Corporate & Investment Banking

Work directly from existing repositories/databases

Be quickly proven in the field (pilot)

Learn and facilitate re-use

Neither software nor its vendors can ‘certify’ rules. Use appropriate legal/policy experts to

‘certify’ any unique circumstances you or your customers may have

flag potential changes

© 2015 Pegasystems Inc. 11

Improved Customer

EXPERIENCE

Rules-driven approach with regulation, LOB, product and customer

customisations on one common platform

Fully integrated and scalable

Automated documentation

Remediation/refresh and look-back capabilities through auto-case

creation

A 360-degree ‘Master profile’ ensures reuse of due diligence and

improved customer experience both for entities & underlying parties

Complex Entity Management: Parent/Child, Relationship Management

for entities, Bulk Processing of Intermediary Accounts

2500+ OOTB due diligence rules/logic

Agile enough to quickly accommodate regulatory or strategic change

Done properly, the outcomes can be impressive

GLOBAL VISIBILITY into customer

66% FASTER IMPLEMENTATION

70% faster onboarding & time

to revenue

STRENGTHS

TYPICAL BENEFITS

© 2015 Pegasystems Inc. 12

Local Pega Contact

For more information about how Pegasystems please reach out to:

Evans Hue

Regional Sales Director

Greater China Pegasystems

Office: +852 3180 1720

Mobile: +852 5285 0789 / +86 139 2806 0010

Email: Evans.Hue@pega.com